Explain how the central bank can pursue contractionary policy through open market operations.

Q: When a Central Bank takes action to decrease the money supply and increase the interest rate, it is…

A: The central bank is responsible for controlling and regulating the supply of money in an economy by…

Q: What are the primary goals of a central bank ? Why it is important for the bank to attain these goal…

A: The central bank is typically in charge of monetary policy and member bank regulation in modern…

Q: By purchasing government debt securities in open market operations, the Central Bank hopes to…

A: Open market operations is the purchasing and selling of various government securities in order to…

Q: Critically discuss the downside of expansionary monetary policy

A: Answer to the question is as follows:

Q: The central bank in Jamaica decides to pursue an expansionary monetary policy. (i) Identify one…

A: Monetary policy is used by the central bank. The expansionary monetary increases money supply in an…

Q: Discuss arguments for and against the independence of the central bank.

A: The economies around the globe are involved in various economic, and financial activities. These…

Q: Why was the European Central Bank less aggressive than the U.S. Federal Reserve Bank in responding…

A: Answer- Need to find- Why was the European Central Bank less aggressive than the U.S. Federal…

Q: Explain, using diagrams, how keynesian monetary transmission works if there is a decrease in money…

A: GDP or real output can be defined as total spending on final goods and services that are produced…

Q: ase, can you answer the question below? I do not need an explanation. Thank you. Which of the…

A: A central bank is a bank which owned and run by the government of that country whereit is situataed…

Q: The economy of Carlsberg is presently in equilibrium, but is suffering a recession as depicted in…

A: Recession is when the economic growth of the country is decreasing due to which the productivity,…

Q: What according to you can be the issues a central bank can face in achieving a target interbank rate…

A: *Answer:

Q: Discuss how the central bank increase the federal funds rate ripples through the different sectors…

A: The economies around the world tend to focus on their growth and development through various…

Q: Why does contractionary monetary policy cause interest rate to rise?

A:

Q: Is expansionary monetary policy responsible for the historically low real and nominal interest rates…

A: The monetary policy is used to manage the level of demand in the economy. The monetary is enacted…

Q: If central Bank increases money supply at a rate that is higher than before , what will be the…

A: The quantity theory of money: The quantity theory of money supply indicates that money supply and…

Q: What are the results of a contractionary monetary policy, which intends to slow down the economy,…

A: The monetary policy is the policy of the monetary authority of the economy regarding the money…

Q: When the Federal Reserve lowers the discount rate, this indicates they are pursuing --------- a)…

A: Any policy employed by Federal reserve would be classified as monetary policy which could be either…

Q: For expansionary monetary policy, the central bank will       buy the Islamic treasury bill in…

A: Monetary policy refers to the policy which is followed by the central bank to control the supply of…

Q: is expansionary monetary policy responsible for the historically low real and nominal interest rates…

A: The Fed, central bank holds the responsibility of the monetary policy formulated in the country…

Q: What are the characteristics of the Central Bank.

A: Central Bank is an apex institute under which all the commercial banks are registered. Central Bank…

Q: Which of the following would be an example of expansionary monetary policy a. Purchase back a…

A: The expansionary monetary policy leads to rise in money supply and fall in interest rates. Thus, the…

Q: Explain in detail the process of Monetary Policy transmission of a decrease in the cash interest…

A: Meaning of Monetary Policy (Monetary Measures): Monetary policy is the policy of the government…

Q: Discuss the effects of expansionary and contractionary monetary policy on real GDP and the price…

A: Monetary policy is the policy of the central bank of the economy to control the money supply in the…

Q: Explain the factors on which an independent central bank can have positive impact and the factors on…

A: The central bank is the sole authority and major financial institution of the economy that indulges…

Q: The Taylor Rule helps a central bank set its federal funds rate based on divergence of actual (i)…

A: The Taylor rule gives a formula that in order to assist central bank in their decisions to alter…

Q: An expansionary policy aims at increasing the money supply, which of the following is an example of…

A: The expansionary policy is used to increase money supply where the Fed can do the following: 1.…

Q: What are the role of the reserve bank to ensure objective financial stabibility

A: The reserve bank or central bank is the apex banking institution in the country that provides…

Q: Define and explain monetary policy

A: The monetary policy is adopted by the central bank to endure price stability by targeting the…

Q: Which action taken by a central bank would reflect expansionary monetary policy? A. Selling treasury…

A: Expansionary monetary policy results in increase in money supply which leads to increase in output…

Q: Explain the main theories of central bank behaviour.

A: Main theories of central bank behavior 1)Monetary stability For monetary stability,central bank may…

Q: Explain the type of policies a central bank can implement to raise the interest rate

A: The goal of the monetary policy of the central bank is to control the amount of money in the…

Q: Discuss two reasons why a central bank would wish to pursue a contractionary monetary policy

A: Contractionary monetary policy means reducing the Ms(money supply) in the money market. When Ms is…

Q: The Taylor Rule helps a central bank set its federal funds rate based on divergence of actual (i)…

A: The central bank of an economy is responsible for maintaining price stability and maximum…

Q: Assume that the Central Bank’s (BoG) primary goal is to correct a weak economy. How can it use open…

A: Ghana is a developing country, rich in various natural resources and continuously improves its…

Q: Why would a central bank be concerned about persistent,long-term budget deficits?

A: Budget deficits refer to the situation of the government when the expenditure in the economy exceeds…

Q: outline two reasons for a central bank choosing to purse a contractionary monetary policy, and…

A: A central bank may choose to pursue a contractionary monetary policy for a number of reasons. One…

Q: In the context of the money market, graphically illustrate and explain the impact of an expansionary…

A: The impact of an expansionary monetary policy on interest rates is illustrated in below figure.

Q: Assume that the central banks (bog) primary goal is to correct a weak economy. how can it use open…

A: Central bank of any country is responsible for its monetary policy, which includes three major…

Q: The long-run effect of the central bank's policy is    in the inflation rate,    in the unemployment…

A: The policy of the central bank regarding the money supply in the economy is known as the monetary…

Q: Changes in the discount rate are more important than open-market operations in implementing monetary…

A: Answer: The most important and commonly used tool of monetary policy is open market operations. So…

Q: What incentives arise for a central bank to fall into thetime-inconsistency trap of pursuing overly…

A: Assume the banking sector attempts to spur demand by expanding the money supply while the market is…

Q: List four mechanisms which the central bank might use to implement a contractionary monetary policy,…

A: The goal of the monetary policy of the central bank is to control the amount of money in the…